Yes and no. Having more competition in the space is excellent news. However I am sad that the world interdependence is eroding as most other countries seem to sit on their hands and happily outsource every bit of manufacturing to a single country.
> unless one considers China and Taiwan to be the same countries
The fact that the CCP is relaxed about core Chinese companies running their manufacturing in Taiwan might suggest that the CCP considers that it can make China and Taiwan one country, at a time of the CCP's choosing.
Maybe new companies can spring up and be competitive with AI assisted design. Im assuming the cost was too high for those old companies to survive right? Small nimble companies could theoretically compete in some segments vs large bloated slobs (even if they have AI as well). This is all just hypothetical thought.
I think Western people still call this situation “outsourcing” when in reality what is happening is that China is better at manufacturing than everyone else, and they’re starting to be better than everyone else at design and engineering, too.
When we buy software from Silicon Valley or a nice Mercedes Benz from Germany we don’t use this same language “outsourcing.”
Colloquially, outsourcing implies low quality or cheap price. No, what’s happening here is that China makes the best products in numerous categories and we are choosing to import them, because the best products are the most desirable.
The west is interested in funneling most of the money to the top no matter what for the last 60 years that has been the drum beat/cry It can’t be done. It can’t be done.
In America, there is one fast food place that does it differently than everyone in the market they don’t franchise and they don’t lease/rent.
They own everything as they expand (the land and the building), which means it’s a little bit slower when you expand, but they don’t care but they are very profitable.
The owner probably gets a call every other week from large equity companies trying to sell them on doing it like everybody else and their pitch they can make you a worldwide company if you just let them in to f you.
Well at this point they are probably the only country in the world that can produce a car end to end starting from the raw iron ore and other elements up to the chips and software that runs on them (I’m sure they will still need to import some small stuff probably like Rhodium or Iridium maybe), who is going to compete with that? Everything done in country, no tariffs at all throughout the entire production cycle.
That said some of these industry especially metallurgical ones will never return to Europe or US as they basically destroy and pollute the environment on a large scale, in China that still seems acceptable but also might change promoting them to outsource to other countries which they already do in some areas I think.
Fair point. Outsourcing was not the right word to use, China today makes products over all quality ranges and almost always they are cheaper than any other alternative. “Giving away” would be a better word.
I think it’s a matter of perceptions catching up to reality. 15 years ago China was definitely still ripping off american products down to the english silk screening.
China didn't get that way by magic. They ran the same playbook that allowed Alexander Hamilton to snatch manufacturing from Great Britain to the US, and the US gave up manufacturing for the same reason the UK gave up manufacturing (suppression of labor interests).
It will be interesting to see what China does. They aren't ideologically committed to exclusively serving the interests of the wealthy, but they still have lots of rich people in the (ahem) Communist Party, so who knows.
This is what was sold to – and often forced on – countries by the US and their allies via the IMF and World Bank. Global free trade meant that you only produced what you had an advantage in and bought what others could produce at lower cost.
I think describing what's happening "other countries seem to sit on their hands and happily outsource every bit of manufacturing to a single country" is disingenuous. It's been dubbed China Shock 2.0 and it's being taken very seriously by the EU. The US admin is a joke and too busy shooting itself in both feet to have coherent policy
It's not reversing, it's continuing the trend of more and more manufacturing moving to Chinese companies. It already happened to TVs and it's currently happening with RAM.
Countries and institutions should always produce things where they are excellent at producing, in forms of specialization and compete in terms of comparative advantages.
While I agree in passing. I think saying you'll export all your work to places with worse labor laws is short-term thinking. Chinese companies are successful yes but they also don't necessarily compete fairly. We still can export large portfolios of goods to China. So to just say they are best because they have a government protected market, plus subsidies so we should abandon local is a bad optimization in the long term
This is so stupid. China itself uses the "dominate and corral" model for their industries, and had severe tariffs to grow their various industrial bases, such as automotive.
Except they've now ground your native industry under their boot and have total monopoly control because you've given up your critical infrastructure. You can no longer stop buying. That isn't an option.
This is geopolitics 101; your fantasy version is decades out of date.
Was it bad when it was the US doing it against the UK? Or is it only when the people doing it eat more rice than us that it is bad? People said the same thing about the Japanese (they steal designs, they copy, it is bad quality, they are stealing our jobs, and so on).
>Or is it only when the people doing it eat more rice than us that it is bad?
It's definitely different when the player doesn't even have to play by the market. Comparing US companies and Chinese companies is not apples to apples.
I will agree that dumping is probably just bad overall. But the US, and much of the rest of the world, allows it to happen both within and outside of their countries, sometimes even financially supporting it with government programs. So I really don't see why I should care that someone in China is doing it. We can't hold others to standards significantly higher than we hold for ourselves.
Yes and no. Having more competition in the space is excellent news. However I am sad that the world interdependence is eroding as most other countries seem to sit on their hands and happily outsource every bit of manufacturing to a single country.
Xiaomi's Xring O3 is manufactured by TSMC N3P process in Taiwan. [1]
MediaTek Dimensity 9500 is also manufactured by TSMC N3P process in Taiwan. [2]
There was no world interdependence change (unless one considers China and Taiwan to be the same countries).
[1] https://www.notebookcheck.net/Xiaomi-launches-XRing-O3-claim...
[2] https://www.notebookcheck.net/MediaTek-Dimensity-9500-Proces...
> unless one considers China and Taiwan to be the same countries
The fact that the CCP is relaxed about core Chinese companies running their manufacturing in Taiwan might suggest that the CCP considers that it can make China and Taiwan one country, at a time of the CCP's choosing.
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MediaTek is a Taiwanese company. Xiaomi could put any backdoor that the government tell them to install and TSMC won't be able to catch that.
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This would be interdependence expanding. Manufacturing isn't the only kind of economic activity
I don't think it's by choice just ask all those extinct manufacturers
Maybe new companies can spring up and be competitive with AI assisted design. Im assuming the cost was too high for those old companies to survive right? Small nimble companies could theoretically compete in some segments vs large bloated slobs (even if they have AI as well). This is all just hypothetical thought.
It was a choice, western oligarchs handed China the means of production on a silver platter in the pursuit of short term profits.
I think Western people still call this situation “outsourcing” when in reality what is happening is that China is better at manufacturing than everyone else, and they’re starting to be better than everyone else at design and engineering, too.
When we buy software from Silicon Valley or a nice Mercedes Benz from Germany we don’t use this same language “outsourcing.”
Colloquially, outsourcing implies low quality or cheap price. No, what’s happening here is that China makes the best products in numerous categories and we are choosing to import them, because the best products are the most desirable.
The west is interested in funneling most of the money to the top no matter what for the last 60 years that has been the drum beat/cry It can’t be done. It can’t be done.
In America, there is one fast food place that does it differently than everyone in the market they don’t franchise and they don’t lease/rent.
They own everything as they expand (the land and the building), which means it’s a little bit slower when you expand, but they don’t care but they are very profitable.
The owner probably gets a call every other week from large equity companies trying to sell them on doing it like everybody else and their pitch they can make you a worldwide company if you just let them in to f you.
Well at this point they are probably the only country in the world that can produce a car end to end starting from the raw iron ore and other elements up to the chips and software that runs on them (I’m sure they will still need to import some small stuff probably like Rhodium or Iridium maybe), who is going to compete with that? Everything done in country, no tariffs at all throughout the entire production cycle.
That said some of these industry especially metallurgical ones will never return to Europe or US as they basically destroy and pollute the environment on a large scale, in China that still seems acceptable but also might change promoting them to outsource to other countries which they already do in some areas I think.
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Fair point. Outsourcing was not the right word to use, China today makes products over all quality ranges and almost always they are cheaper than any other alternative. “Giving away” would be a better word.
I think it’s a matter of perceptions catching up to reality. 15 years ago China was definitely still ripping off american products down to the english silk screening.
China didn't get that way by magic. They ran the same playbook that allowed Alexander Hamilton to snatch manufacturing from Great Britain to the US, and the US gave up manufacturing for the same reason the UK gave up manufacturing (suppression of labor interests).
It will be interesting to see what China does. They aren't ideologically committed to exclusively serving the interests of the wealthy, but they still have lots of rich people in the (ahem) Communist Party, so who knows.
14 replies →
It's manufactured in Taiwan.
This is what was sold to – and often forced on – countries by the US and their allies via the IMF and World Bank. Global free trade meant that you only produced what you had an advantage in and bought what others could produce at lower cost.
I think describing what's happening "other countries seem to sit on their hands and happily outsource every bit of manufacturing to a single country" is disingenuous. It's been dubbed China Shock 2.0 and it's being taken very seriously by the EU. The US admin is a joke and too busy shooting itself in both feet to have coherent policy
https://en.wikipedia.org/wiki/China_Shock_2.0
As if our EU leaders aren't a complete joke as well. Pushing ChatControl, fascism and gambling everywhere. We're just as much of a joke.
It's not disingenuous. It was obvious this was happening 15 years ago and the US and EU could have done something about it back then.
The tendency to protect corporate profit margins is the western Achilles heel and China knew they could exploit that.
yet somehow the outcome for the US has been much better. EU wins on paper though, yay!
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So same as before?
Except this trend is actually reversing now, with fabs being built outside of Taiwan?
It's not reversing, it's continuing the trend of more and more manufacturing moving to Chinese companies. It already happened to TVs and it's currently happening with RAM.
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Countries and institutions should always produce things where they are excellent at producing, in forms of specialization and compete in terms of comparative advantages.
We surely cant be this naive after the recent history of:
- China weaponizing the world's dependence on rare earth
- The US weaponizing the world's dependence on SWIFT
- Russia weaponizing Europe's dependence on natural gas
- Iran weaponizing the the world's dependence of oil supply through strait of Hormuz
This is true until you add a layer of geopolitics to your analysis.
Supply chain advantages make the country that produces most of the stuff progressively better at doing everything.
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While I agree in passing. I think saying you'll export all your work to places with worse labor laws is short-term thinking. Chinese companies are successful yes but they also don't necessarily compete fairly. We still can export large portfolios of goods to China. So to just say they are best because they have a government protected market, plus subsidies so we should abandon local is a bad optimization in the long term
Those thing are not static! Changing them can be a political decision. It was a political decision in China to become excellent at manufacturing.
That depends on if everybody gets along and is willing to trade
This attitude, if followed without qualifications, is dangerously naive and shortsighted, as the last few years of geopolitical events have shown.
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Families should always eat at the restaurants that produce the most excellent cuisine. /s
If the Linux drivers aren't up upstreamed and the chips aren't sold to anyone else, meh.
Lol, no.
This is so stupid. China itself uses the "dominate and corral" model for their industries, and had severe tariffs to grow their various industrial bases, such as automotive.
Same is true of US, Germany, Britain, etc
The US had open markets and low tariffs for a long time; China's automotive tariffs were amongst the strongest in the entire world.
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From the outside, it is still competition.
If they go too far to impose their system, we stop buying :)
Except they've now ground your native industry under their boot and have total monopoly control because you've given up your critical infrastructure. You can no longer stop buying. That isn't an option.
This is geopolitics 101; your fantasy version is decades out of date.
No. Chinese dumpers undercutting everyone else and destroying the competition is never good.
Was it bad when it was the US doing it against the UK? Or is it only when the people doing it eat more rice than us that it is bad? People said the same thing about the Japanese (they steal designs, they copy, it is bad quality, they are stealing our jobs, and so on).
>Or is it only when the people doing it eat more rice than us that it is bad?
It's definitely different when the player doesn't even have to play by the market. Comparing US companies and Chinese companies is not apples to apples.
> Was it bad when it was the US doing it against the UK? Or is it only when the people doing it eat more rice than us that it is bad?
dumping is always bad.
I will agree that dumping is probably just bad overall. But the US, and much of the rest of the world, allows it to happen both within and outside of their countries, sometimes even financially supporting it with government programs. So I really don't see why I should care that someone in China is doing it. We can't hold others to standards significantly higher than we hold for ourselves.